Transcript Separation Agreements, Mediation, and Arbitration

Separation Agreements,
Mediation, and Arbitration
Separation agreements
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Vast majority of divorce cases are settled
Divorce trials are exceedingly rare
Emphasis in divorce practice is on
negotiation skills (sometime with your own
client)
– Knowledge of facts of case
– Knowledge of law and how it applies to
facts
– Knowledge of what assigned judge would
do if case went to trial
“Client control” issues become crucial
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Role of client vs role of attorney
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Client determines goals of case
Attorney decides how to achieve those goals
Often referred to as “where to go” vs “how to
go”
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Client decides where to go
Attorney decides how to go
Emotional aspects of divorce
complicate decision making
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Working relationship between lawyer and
client more important in divorce cases than in
most other types of litigation
Many of the personality traits that make a
divorcing party a less than acceptable
spouse also impair his/her ability to work
effectively with a lawyer
Settlement has many advantages
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Reduced cost (trials are expensive)
Agree to terms that the court cannot order
absent an agreement, but once agreed-upon,
will be legally enforceable
– Post-majority child support
– Non-modifiable periodic alimony
Settlement Agreements
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Careful drafting required
Interpretation issues as in any other form of
contract
Unilateral mistakes (failure to fully examine
all facts before agreeing) will not result in
agreement being invalidated. See In re
Marriage of Manzo in casebook
Unconscionable agreements remain subject
to invalidation
What is unconscionable?
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An absence of meaningful choice on the part
of one of the parties together with contract
terms which are unreasonably favorable to
the other party
Will either of these alone be sufficient for a
finding of unconscionability in the context of
a divorce settlement/separation agreement?
Uniform Marriage and Divorce Act
(UMDA)
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Review the circumstances surrounding the
agreement for fraud, overreaching, sharp
dealing, or concealment of assets
Examine the economic circumstances of the
parties resulting from the agreement
Merged or Not Merged?
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A separation agreement that is “merged” into
a divorce judgment loses it character as a
separately enforceable contract. Enforced
as court judgment, which might also render
some terms inherently modifiable, such as
alimony (Goldman v Goldman in casebook)
An agreement incorporated but not merged
will retain its separate status as a legally
enforceable contract
Advantages of Non-Merger
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Separate basis to enforce terms using
contract law
Can render certain provisions, such as
alimony, non-modifiable even if state law
permits alimony to be modified upon
changed circumstances
Advantages of Merger
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Enforcement may have greater options, such as
contempt of court
May make agreement harder to challenge because
most states provide only very narrow grounds for
attacking the validity of a court order or judgment
(narrower than ground allowed for challenging a
contract – see Jorgensen v Jorgensen in casebook)
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Extrinsic fraud required in many states
Others allow Rule 60(b)- type relief for fraud, mistake,
surprise, excusable neglect, inadvertence
Attorney concerns
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Representation by counsel at the time the
agreement was negotiated makes it harder to
argue that the agreement be vacated
No one attorney can represent the interests
of both spouses, so those agreements
drafted with the participation of only one
attorney, even if he/she met with both
spouses, are more likely to be successfully
challenged
Divorce Mediation
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Many states and local courts have
mandatory mediation rules
– Going through the mediation process may
be mandatory
– Settlement is voluntary (but may be
significantly “pressured”)
What may be mediated
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Some states prohibit mediation of childrelated issues or in cases of domestic
violence
Others require mediation in cases involving
contested child-related issues
Florida law
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Fl Stat § 44.102(2)(c): In circuits in which a family
mediation program has been established and upon a
court finding of a dispute, shall refer to mediation
all or part of custody, visitation, or other parental
responsibility issues as defined in s. 61.13. Upon
motion or request of a party, a court shall not refer
any case to mediation if it finds there has been a
history of domestic violence that would
compromise the mediation process.
Mediation models
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Attorney mediation
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Mediation by neutral attorney without presence of
independent counsel for each party
Mediation by neutral attorney with full participation
by counsel for each party (“facilitated negotiation”)
Non-attorney (private) mediation
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Done my mental health professionals, social
scientists, clergy, trained volunteers
Florida Family Mediation
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44.1011(2)(d): "Family mediation" which means mediation of
family matters, including married and unmarried persons,
before and after judgments involving dissolution of marriage;
property division; shared or sole parental responsibility; or child
support, custody, and visitation involving emotional or financial
considerations not usually present in other circuit civil cases.
Negotiations in family mediation are primarily conducted by
the parties. Counsel for each party may attend the
mediation conference and privately communicate with their
clients. However, presence of counsel is not required, and,
in the discretion of the mediator, and with the agreement of the
parties, mediation may proceed in the absence of counsel
unless otherwise ordered by the court.
[Emphasis added.]
Divorce Arbitration
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Latest trend in Alternative Dispute Resolution
(ADR) in divorce cases
Not common yet in FL
Very common in MI (in part due to long waits
for divorce trials before the family division
was created in 1997)
What can be arbitrated?
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Property issues: Most states that permit
divorce arbitration allow binding arbitration of
property division issues with very limited
judicial review (for fraud, bias, arbitrator
exceeding his/her authority in the arbitration
agreement, etc.)
Alimony issues: Permitted by most states
What about the children?
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Trend it toward permitting arbitration of child
support issues
A few states permit arbitration of custody and
visitation issues, but build-in enhanced
judicial review of arbitrators custody/visitation
award to assure that child’s best interests are
met (consistent with court’s role as parens
patriae, see Faherty v Faherty in casebook)
Florida Law
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Fl. Stat. 44.104(14) prohibits arbitration on
issues of “child custody, visitation, or child
support”
Arbitration Rules
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AAA (American Arbitration Association) rules
often agreed upon in the absence of specific
state rules or statutes
Some states have adopted special family law
arbitration statutes or rules
Those that have not use the Uniform
Arbitration Act (which does not exclude family
law matters, including custody)
Sample Family Law Arbitration Statute
(MI)
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Parties may stipulate to binding arbitration by a signed
agreement that specifically provides for an award with respect
to 1 or more of the following issues:
(a) Real and personal property.
(b) Child custody.
(c) Child support, subject to the restrictions and requirements
in other law and court rule as provided in this act.
(d) Parenting time.
(e) Spousal support.
(f) Costs, expenses, and attorney fees.
(g) Enforceability of prenuptial and postnuptial agreements.
(h) Allocation of the parties' responsibility for debt as between
the parties.
(i) Other contested domestic relations matters.
Qualifications of Arbitrators
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Anyone agreed upon by the parties
If court appointed must meet all of the following
qualifications:
(a) Is an attorney in good standing with the state
bar of Michigan.
(b) Has practiced as an attorney for not less than 5
years before the appointment and has demonstrated
an expertise in the area of domestic relations
law.
(c) Has received training in the dynamics of
domestic violence and in handling domestic
relations matters that have a history of domestic
violence.
Record (Transcript) of Arbitration
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A record shall not be made of an arbitration hearing
under this chapter. If a record is not required, an
arbitrator may make a record to be used only by the
arbitrator to aid in reaching the decision. The parties
may provide in the arbitration agreement that a
record be made of those portions of a hearing
related to 1 or more issues subject to arbitration.
A record shall be made of that portion of a hearing
that concerns child support, custody, or parenting
time in the same manner required by the Michigan
court rules for the record of a witness's testimony in
a deposition.
Enhanced Review on Child-Related
Issues
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The court shall not vacate or modify an award
concerning child support, custody, or parenting time
unless the court finds that the award is adverse to
the best interests of the child who is the subject of
the award
A review or modification of a child support amount,
child custody, or parenting time shall be conducted
and is subject to the standards and procedures
provided in other statutes, in other applicable
law, and by court rule that are applicable to child
support amounts, child custody, or parenting
time.
Trends
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Will see more states expressly authorize
arbitration of family law disputes
Enhanced review of child-related issues will
be a feature of all or nearly all new statutes
(Why? Court’s responsibility for the welfare
of children of divorce. Private arbitrators not
generally held to same standard as a trial
court)